In the circular flow diagram, firms get their ability to pay for the costs of production from the
A)revenues they receive for their products.
B)resources they acquire in the resource markets.
C)incomes they earn for their resources.
D)goods and services they get in the product markets.

Question

Quizplus · Accepted Answer

Firms generate revenue by selling goods and services in the product markets. This revenue is what enables them to cover the costs of production, including paying for labor, materials, and other inputs.

In the Circular Flow Diagram, Firms Get Their Ability to Pay